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2.
The Internet of Things Trend
Cumulative Midterm Assignment – Final Project Section 2
The ‘Internet of Things’ Trend – Digital Analytics Impact and Opportunities
As outlined in Section 1, Gartner believes the Internet of Things has already ignited a
new era in information technology that it is in the process of disrupting every aspect of business.
At its core, the IoT represents a major inflection point in the history of the Internet as
connections move beyond computing devices and begin to power billions of everyday devices,
from parking meters to home thermostats. According to recent Gartner studies, there were 2.5
billion devices with individual Internet IP addresses in 2009, most of them servers, PCs, smart
phones and other traditional IT hardware. By 2020 that number will be 30 billion, only a small
percentage of which will be standard IT equipment (Fogarty, 2013).
As a result of all of these connected devices data sources are growing at an
unprecedented velocity and along with it, the ability to provide insights immediately back into
the marketing feedback loop. This new world of machine-to-machine communications and the
resulting data have the potential to provide deeper insights into a wide array of events and buying
behaviors. J. Walker Smith, executive chairman of The Futures Company, a strategic insight and
innovation-focused consulting firm, believes the Internet of Things will transform static business
data into a more fluid and dynamic entity that will dramatically change the face of product
development, pricing, and the way enterprises interact with customers (Greengard, 2013). And
Gartner estimates that by 2017 more than 50 percent of analytics implementations will make use
of event data streams generated from instrumented machines, applications, and individuals
creating unique new opportunities and challenges for marketing professionals (Accenture, 2014).
Seeing a growth opportunity, Cisco Systems has ranked connected advertising and marketing as
one of its top three IoT focus areas (Adler, 2013).
Consider what U.K based software company EVRYTHNG did for Diageo’s spirits
marketing business last year. It ran a pilot program in Brazil for Father’s Day that enabled
consumers to use smart phones to scan product codes on individual bottles of spirits, turning
each physical product into a uniquely identifiable object of digital media. The giver could use
his or her smart device to create a personalized video and upload it to the cloud. The receiver of
the gift could then download the video to receive the message. According to Diageo the
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3.
The Internet of Things Trend
campaign resulted in increased loyalty to the brand, increased personalization of the brand
experience, and increased insight about how its products were bought, sold, and used (Rayport,
2013).
U.S. food company McCormick is leveraging the capability of machines to use data to
“sense” the world as humans do. Using Enterra Solution’s Cognitive Reasoning Platform,
McCormick’s FlavorPrint site asks customers to rate a variety of flavors in order to learn taste
and, from that, creates unique taste preference profiles. If customers provide additional
information, such as cooking preferences, equipment, and typical pantry items, they can receive
better personal product and recipe recommendations. As far as these customers know, they’re
providing just a few raw facts in return for a great deal of personalized value. From
McCormick’s point of view, learning customers’ taste preferences leads to better insights,
product decisions, and enhances its ability to serve consumers (Accenture, 2014).
Although existing networked systems already offer interesting opportunities like the two
examples above, it represents just the beginning stages of a rapidly changing product
marketplace driven by IoT. For example, within a few years an exercise band (think Nike’s Fuel
Band) could serve as a mechanism that helps marketers understand a person’s everyday activity
patterns in minute detail while connecting with big data and with partners to create a more
refined marketing approach. For example, if a person is a runner or cyclist the manufacturer
might suggest appropriate attire and shoes. Also, beverage companies such as Coca Cola or Pepsi
could enable connected fountain machines in restaurants, movie theaters, and elsewhere to better
adjust marketing and sales to fit constantly changing behaviors and conditions (Greengard,
2013).
These current and futuristic examples demonstrate the power of the enormous data that is
being created and shared across intelligent devices and systems as a result of the IoT trend. Data
analytics can help to extract the untapped value to enable companies to provide better products
and services while enriching consumer experiences. Exhibit 1 below provides a humorous,
although not that farfetched, example of the future possibilities.
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